Oil climbs after U.S. leaders strike provisional debt deal

Oil climbs after U.S. leaders strike provisional debt deal

Oil prices rose in early Asian trade on Monday after U.S. leaders reached a tentative debt ceiling deal, possibly averting a default in the world's largest economy and oil consumer, said Hydrocarbonprocessing.

Brent crude futures climbed 39 cents, or 0.5%, to $77.34 a barrel by 2317 GMT, while U.S. West Texas Intermediate crude was at $73.12 a barrel, up 45 cents, or 0.6%.

U.S. President Joe Biden and House Speaker Kevin McCarthy on Saturday reached an agreement in principle to suspend the $31.4 trillion debt ceiling. Both leaders expressed confidence on Sunday that members of the Democratic and Republican parties will vote to support the deal.

However, relief for global financial markets could be short-lived as once the deal is approved, the U.S. Treasury is expected to issue bonds that will further tighten liquidity and make funding more expensive for companies already reeling from high interest rates.

Last week, Brent and WTI notched a second consecutive weekly gain of more than 1% on the progress of the U.S. debt ceiling talks and after Saudi energy minister warned short-sellers betting oil prices will fall to "watch out" for pain.

Some investors took the warning as a signal that OPEC+, the Organization of Petroleum Exporting Countries and allies including Russia, could consider further output cuts at a meeting on June 4. However, Russian Deputy Prime Minister Alexander Novak said last week he expected no new steps from OPEC+ as a decision on voluntary production cuts was made just a month back.

U.S. energy firms cut rigs for a fourth week in a row, with oil rigs down by five to 570 last week to their lowest since May 2022, energy services firm Baker Hughes Co said in its weekly report on Friday.

Investors are watching for China's manufacturing and services data this week as well as U.S. nonfarm payroll data on Friday for signals on economic growth and oil demand.

We remind, Russia is leaning towards leaving oil production volumes unchanged ahead of an OPEC+ policy meeting on June 4 because Moscow is content with current prices and output, three sources with knowledge of current Russian thinking told Reuters. OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other allies, surprised the market on April 2 with further output cuts that pushed up the price of oil.


mrchub.com

China's fuel oil imports soar as inspections curb bitumen blend intake

China's fuel oil imports soar as inspections curb bitumen blend intake

China's independent oil refiners are ramping up fuel oil imports to process into gasoline and diesel amid robust refining margins as ongoing cargo inspections at refining hub Shandong have cut off supplies of lower-priced feedstock bitumen blend, said Hydrocarbonprocessing.

The independent refiners, known as teapots, are mainly based in China's Shandong province, where the government has increased inspections to identify instances where crude oil is mislabeled as bitumen blend, a mix of Venezuelan heavy oil and residue fuel used to produce road-paving asphalt.

The inspections are forcing refiners to turn to fuel oil instead of bitumen blend driving the higher fuel oil imports, said traders and analysts.

Fuel oil arrivals, predominantly declared as from Malaysia and Russia, may reach 2.3 million tons this month, according to estimates by tanker trackers Refinitiv and Vortexa. That is down from the 2.67 million tons imported in April, according to Chinese customs data, a 10-year high.

Diluted bitumen imports sank to 121,000 tons in April, customs data showed, the lowest since August 2019, and a fraction of March's 1.42 million tons. May imports could be even lower, traders said. "Fuel oil benefited from the bitumen mix saga," said a senior trader supplying Shandong, adding that record imports arrived even as the authorities also tightened checks on fuel oil.

Crude, unlike bitumen mixture, is subject to strict import quotas, while Beijing manages fuel oil imports via a looser quota system. Independent refiners often switch to lower-priced fuel oil or bitumen mix when short of crude quotas.

Amid the customs checks, companies have avoided importing bitumen blend while others have rebranded cargoes as crude oil using import quotas as authorities move to draft up quality specifications for the product to stop the mislabeling, traders said.

The inspections have limited the teapots' throughput to 64.3% of their capacity as of May 24, higher than April but below earlier expectations, despite robust domestic refining margins, said Zhou Mi, an analyst at Chinese consultancy JLC.

Most of the bitumen mixture imports are blended from Venezuela's heavy crude Merey but branded as sourced from Malaysia, a transshipment hub, to circumvent U.S. sanctions on the South American exporter, Reuters has reported.

Fuel oil imports classified as from Malaysia and Russia have surged since the start of 2023, as western sanctions on Moscow forced a diversion of Russian fuel from Europe to Asia, sometimes via transshipment in the United Arab Emirates, traders said.

It was reported earlier, Russia is leaning towards leaving oil production volumes unchanged ahead of an OPEC+ policy meeting on June 4 because Moscow is content with current prices and output, three sources with knowledge of current Russian thinking told Reuters. OPEC+, which groups the Organization of the Petroleum Exporting Countries with Russia and other allies, surprised the market on April 2 with further output cuts that pushed up the price of oil.

mrchub.com

Huhtamaki signed a EUR 125 mln sustainability-linked term loan facility

Huhtamaki signed a EUR 125 mln sustainability-linked term loan facility

Huhtamaki Oyj has signed a EUR125 mln bilateral term loan facility agreement with a maturity of two years, said tthe company.

The term loan will be used for refinancing and general corporate purposes of the Group.

The facility has a one-year extension option at the discretion of the Lender, and the interest margin is tied to three sustainability indicators: absolute scope 1 and 2 greenhouse gas emissions amount; share of non-hazardous waste recycled; and Ecovadis Rating.

The lender of the facility is OP Corporate Bank Plc.

We remind, Huhtamaki has inaugurated a 12,500m2 expansion of its paper-based packaging manufacturing site in Nules, Spain. The expansion involved a EUR20m (USD20.8m) investment, which included a grant of EUR2.2m (USD2.3m) from the Conselleria de Hacienda y Modelo Economico. Huhtamaki said the expansion will begin production this January and double the site’s capacity.

mrchub.com

Eni and RINA sign partnership to develop HVO biofuel

Eni and RINA sign partnership to develop HVO biofuel

RINA, an international company specializing in inspection, certification and engineering consultancy, and Eni have signed an agreement to jointly develop initiatives that can contribute to the energy transition and decarbonization of their respective operations and particularly maritime transport, where RINA and Eni can benefit from each other's expertise, said Hydrocarbonprocessing.

Specifically, the agreement focuses on the use of HVO (Hydrogenated Vegetable Oil) biofuel produced by Eni in its Venice and Gela bio-refineries, as well as of other energy carriers such as “blue” or “green” hydrogen and ammonia from biogenic, renewable or waste raw materials not competing with the food chain, in the naval sector. Moreover, the partnership encompasses the development of initiatives for the logistics and value chain of new energy carriers, and the adoption of certified methods for the "taxonometric" calculation of the emissions benefits they will generate.

Eni and RINA will also consider carrying out experiments and pilot projects related to the on-board capture of CO2 emissions in order to further contribute to pursuing the naval sector's sustainability goals.

Ugo Salerno, Chairman and CEO of RINA, said: “Cooperation between companies is the way forward towards the common goal of decarbonizing industry and transport. By sharing know-how and experience with Eni, we will contribute to developing innovative energy supply models. Our collaboration will begin by focusing on the maritime sector, a diversified and hard-to-abate industry that can draw on initiatives already adopted by other industrial segments to decarbonize operations”.

Giuseppe Ricci, Chief Operating Officer for Energy Evolution at Eni, said: “Eni and RINA can make a significant contribution to the decarbonization of maritime transport with their wealth of expertise and technological capabilities. Following a technology-agnostic approach, we are exploring multiple solutions. Thanks to this agreement, we will have the opportunity to study and develop them in the short, medium and long term, with the objective of making maritime transport more sustainable and meeting the needs of shipowners and logistics operators”.

We remind, Eni has launched an initiative to encourage the use of HVOlution, Eni Sustainable Mobility’s first diesel produced from 100% renewable raw materials (according to EU Directive 2018/2001 'REDII'), by its suppliers' vehicles transporting fuels to Eni Live Stations. It aims to contribute to the decarbonisation of the heavy transport sector, which involves approximately 300 vehicles in Italy’s distribution service. To date, more than 200,000 km have been covered using pure HVO, making it a major contributor to CO2 emission reduction.

mrchub.com

Amcor, Mars, and P&G enter partnership with Delterra to scale up circular plastics solutions in Global South

Amcor, Mars, and P&G enter partnership with Delterra to scale up circular plastics solutions in Global South

A strategic partnership has been formed between Amcor, Mars, P&G, and Delterra to bring the latter’s upstream and downstream circular plastics solutions to scale in the Global South – an effort hoped to cut down on plastic pollution in the region, said Packagingeurope.

In the lead-up to the second negotiating committee meeting for a Global Plastics Treaty (INC-2), the partners state that plastic pollution ‘is a symptom of the broader issue of underperforming or non-existent waste management and circularity solutions’.

As such, the partnership seeks to invest in waste prevention programmes across the value chain. This includes the global rollout of Plastic IQ, Deltarra’s digital tool designed to help companies understand and improve their plastic footprint – enabling them to design waste out of the system and tackle upstream waste.

Furthermore, the company’s Rethinking Recycling programme aims to capture recyclable and compostable materials and direct them back into the loop, contributing to supply and demand. The investments are also set to develop material traceability solutions to provide transparency on source, quality, and ethical concerns along the recycling value chain.

We remind, Amcor, a global leader in developing and producing responsible packaging solutions, announced that it has signed a definitive agreement to acquire Moda Systems, a leading manufacturer of state-of-the-art, automated protein packaging machines.

mrchub.com